Exclusive: Cultivating the green shoots of surveillance recovery

Jason Burrows, West Coast Regional Director, IDIS America pinpoints the new growth markets in video surveillance.

There will be growth in the video sector in the turbulent economic times ahead. The challenge will be where to find it.

At the moment nobody knows how quickly (or slowly) the world’s economies will recover from COVID-19. The most optimistic scenarios being touted see the US bouncing back by the third quarter of 2020, while more cautious forecasts put the recovery later, some as late as the first quarter of 2023. The big variation in all these predictions is mainly down to one unknown: whether or not there will be a global resurgence of the virus. And that depends on other things we cannot be sure of just yet, such as how successful the various quests for a vaccine and treatments will be. And how much the virus itself mutates.

So, there’s little chance the security industry can avoid turbulence and uncertainty. But it doesn’t have to – because those suppliers that can adapt and be flexible will identify new sources of demand.

A diverse mix of customers

During weeks of lockdown some systems integrators have been discovering the advantages of having a mixed portfolio of customers, in terms of resilience. In several cases they were able to keep going because of the diversity of projects in their pipeline: when some installations were delayed or cancelled, new work in other areas helped fill the gap.

For example, one of our integration partners told us why they didn’t need to furlough or lay off any staff – it’s because they experienced an increase in demand from customers in the video gaming sector and in broadcasting, which offset project delays elsewhere. Gaming is an obvious example of a business sector that continued to prosper during the lockdown, with consumers stuck at home.

Growth sectors beyond COVID-19

Similarly, the increased use of cloud-services and applications during the pandemic, such as video conferencing, has resulted in a significant rise in data centre IP traffic. Already viewed by many investors as critical infrastructure for the future economy, data centres have allowed businesses and government to keep functioning during the pandemic, which has accelerated some growth. While hyperscale construction projects have been delayed, these are likely to restart at pace and coincide with the continued expansion of storage and capacity at existing infrastructure. For the skilled systems integrator, this offers mission critical, compliance-driven security projects and upgrades, as well as attractive, sustainable maintenance contracts.

At the same time, for security companies looking to diversify, tech startups and innovators are also a good target. Smaller, agile businesses bounce back faster and are often found in some cool places that happen also to be complex to protect, such as multi-use business hubs and former industrial sites. Young entrepreneurs and communities of micro-businesses may like older buildings but that doesn’t mean they want to live in the past when it comes to security. Indeed, they are more likely to be tech savvy and to take a more active approach to issues ranging from sustainability to human rights. So, solutions that can demonstrate greater carbon efficiency, or whose vendors do not have links with repressive regimes, are likely to be preferred.

And think about that broadcasting example cited above. What at first appeared to be a major problem for the broadcaster proved not to threaten it’s long term viability and turned into an advantage for the systems integrator: temporary suspension of studio recording in favour of broadcasting from remote locations meant that normal restrictions on system installation and maintenance were lifted. The video projects were able to go ahead more quickly than originally planned.

These unexpected bonuses are worth looking out for. Whenever normal economic activity is disrupted, there are always winners and losers.

Keeping Americans and the supply chain healthy

In January 2020, a report by Pharmaceutical Investing News predicted that the wider healthcare sector would comprise almost a fifth of the US economy by 2026. Even with the disruption of the pandemic it seems certain that businesses related to the sector will remain resilient and many will likely need video solutions that allow operations to scale up – or adapt to changing regulatory requirements.

For example, in the pharmaceutical sector we may see a shift in the way drugs are manufactured. The pandemic exposed weaknesses in the global drugs supply chain. Although the US dominates the global pharmaceutical market both in consumption and development, three quarters of ingredients come from overseas. Regulators may now come under pressure to increase resilience, with more production taking place on home soil as part of moves to shore up the sector.

In which case, the sort of locations and activities where video solutions will be needed include not just laboratories where drugs are developed and tested but warehousing and storage sites, temperature regulated environments and logistics and transportation operations.

It is estimated that more than 800,000 Americans are directly employed in the sector, with a further 3.5 million jobs supported by it, so this is big business.

Hospitals, clinics and other healthcare settings came under pressure during the pandemic and have seen the benefits of increased security systems automation. Successful implementations have shown how processes including access control, visitor management and video monitoring and analytics, can be integrated not just to improve security, but to make it easier to deploy and manage teams working between locations.

In the most secure healthcare settings, most notably at psychiatric units, comprehensive area coverage has been made more affordable by the latest generation of fisheye cameras, which now do the job of two or three fixed lens cameras. This improved coverage, along with failover protection for recorded video data, is allowing the quality of care provision to be better investigated, audited and verified.

The grass keeps growing

One new area of business that was already growing in the US before COVID-19 is cannabis production. As of January 2020, cannabis had been legalised for recreational use by adults over the age of 21 in 11 US states and for medical use in 33 states. As a result, a booming sector is growing up, with complex security needs. Currently, security compliance for cannabis businesses is mandated at state level, not federal, although as legalisation spreads it seems almost certain that regulations will be standardised sooner or later.

Common requirements include the need to have adequate video surveillance for marijuana-licensed premises. Many states require sites to have at least full-HD video quality, with unobstructed video capture for all areas where cannabis is handled, including at all stages of the production and selling process, through to the proper disposal of plants ensuring that unwanted stock is not sold on. Other states require that video be monitored 24/7 and storage for at least 30 days is also a standard requirement, making failover technologies imperative.

These customers will need affordable long-term solutions, offering a low total cost of ownership (TCO) to ensure continued compliance. This can give integrators recurring monthly revenue (RMR) from maintenance, remote diagnostics and system health checks. Where 24/7 system monitoring is mandated, most cannabis firms will lean toward third-party services rather than building control rooms and hiring in-house security staff, so there’s opportunities for central monitoring services, virtual guarding and for rapid mobile response.

Of course, business owners are not just looking for video systems to tick a compliance box, they also want to prevent losses and protect their bottom lines.

But there are some important ways to help these growing customers strip out unnecessary costs, as well as increasing security. For instance, monitoring and mobile response costs can soon rack up with traditional video systems that are prone to false positive alarms. The result of this can be more frequent call out fees, or loss of service if monitoring companies deem sites too difficult to manage. Deep learning analytics can now make a big difference, because they offer higher-level detection accuracy by ignoring harmless environmental factors that tend to trigger false alarms. Deep learning algorithms classify and detect object types, such as people and vehicles, to generate accurate AI-assisted notifications which allow operators to visually verify and respond to genuine threats and suspicious activity.

Setting up high-yield indoor greenhouse production is expensive, so firms will factor in video lifecycle costs and will want the assurance their systems will adapt and scale.  They will be looking for solutions with low ongoing license fees, that offer easy maintenance with timely and straightforward firmware updates, local ongoing technical support and warranties against equipment failure, especially since growers are likely to be located in areas dealing with varied weather conditions.

Today’s end-to-end technology delivers on this objective by being easy to deploy and use. It also enables affordable, high definition, comprehensive wide area coverage, and built-in failover, and it gives truly efficient data compression and storage options.

Added together, these benefits will give growing businesses the confidence that it’s worth investing in video security – and for systems integrators, that could help diversify their customer bases.

www.idisglobal.com

This article was published in the July 2020 edition of International Security Journal. To pick up your FREE digital copy, click the link here